A week or so ago, I looked at the hardest-working versus highest-earning states using data from a new study (PDF) from the Bureau of Labor Statistics.
The study by Dante DeAntonio used data from the Current Employment
Statistics -- a monthly survey of more than 400,000 U.S. business
establishments -- to generate estimates for employment, hours, and
earnings for U.S. states. My MPI
colleagues and I were curious about how data would play out for U.S.
metropolitan regions, so we contacted DeAntonio and he graciously
supplied the data.
Let's begin by looking at two key maps created by the MPI's Zara
Matheson. The maps are based on data for all U.S. metros, but identify
the 46 largest metros (those with more than one million people) by name.
The first map (above) shows average hours worked per week. Among
large metros, Washington, D.C. tops the list with an average of 36
hours per week. Las Vegas is next, followed by San Antonio, Virginia
Beach, and Seattle. Kansas City, Nashville, Miami, Phoenix, and San
Jose round out the top ten. At the opposite end of the spectrum are
Buffalo, Rochester, Minneapolis, Columbus, Philadelphia, and Pittsburgh.
The second map charts the highest-earning metros -- measured in terms
of average hourly earnings. Among large metros, San Jose -- Silicon
Valley -- tops the list, followed by San Francisco, D.C., New York,
Minneapolis, and Philadelphia. The lowest-earning metros are Oklahoma
City, Las Vegas, Louisville, Buffalo, Memphis, Jacksonville, Cleveland,
What's most striking is how little overlap there is between the two
maps. The locations where people put in longer hours are also the ones
where workers earn less.
So, I decided to take a closer look at what might be behind these
patterns. With the help of Charlotta Mellander, we ran a series of
scatter-graphs and performed a simple correlation analysis to probe the
effects of various demographic and economic factors on metro-level
working hours and earnings. We ran the analysis both for all 340 U.S.
metros and for the 46 large metros (again, those with more than one
million people). As usual, I point out that our analysis points to
association between variables only. It does not imply causation, and
other factors may complicate the picture. Still, as with states, a
number of patterns are striking.
First and foremost, we find a total lack of correlation between
hours worked and earnings across U.S. metros. This holds true both for
the largest metro areas and for all U.S. metros: there was no
statistical significance at all for the correlation between these two
variables in either case.
Second, hard work and long hours do not translate into economic
wealth. There was no correlation whatsoever between working hours and
economic output, measured as gross metropolitan product per capita, for
either large metros or all metros.
Third, as we found in our earlier analysis of states, when it comes
to earning power, working smarter trumps working harder across the
One way to measure smart work is by the level of human capital --
that is the percentage of a metro's workforce with a bachelor's degree
and above. Human capital is closely associated with metro earnings. The
correlation is .53 for all metros and even higher, .74, for large
metros. Silicon Valley -- that is the San Jose-Sunnyvale-Santa Clara
metro -- literally jumps off the chart. San Francisco, Seattle,
D.C., greater New York, Minneapolis, and San Diego are all above the
fitted line in the upper-right hand quadrant of the graph: they combine
above-average human capital with above-average wages. Louisville,
Oklahoma City, Memphis, Pittsburgh, Milwaukee, and Nashville are all
below the line -- combining low levels of human capital with low wages --
wages, in fact, that are even lower than their human capital levels
would predict. Interestingly, Detroit, New Orleans, Phoenix, and
Las Vegas have significantly higher wage levels than their human
capital levels would predict.
Source: Creative class data are from the Bureau of Labor Statistics, 2006. Creative Class definition as in Rise of the Creative Class.
Another way to gauge smart metros is by the share of their workforce
in creative, professional, and technical jobs -- that is, metros with
high percentages of workers in the creative class. Creative class
metros have significantly higher average earnings. In fact, the
correlation between earnings and the percentage of workers in creative
class jobs is slightly higher than that for human capital -- .58 for all
metros and .78 for large metros. The line on the scatter-graph runs
quite steeply upward. Silicon Valley is again a huge outlier, way up in
the right hand corner of the graph. San Francisco, Seattle, and greater
New York are all above the line -- with high levels of creative class
work and high average wages. D.C., interestingly enough, is slightly
below the fitted line: its average wages are slightly less than its
percentage of creative class workers would predict.
Earnings are far less in more traditional industrial economies.
Metro earnings are negatively correlated with blue-collar,
working-class jobs -- the correlation is -.31 for all metros and -.5 for
Earnings are also associated with open metros. One measure of
openness is the share of immigrants or foreign-born people. Over the
past several years, we've seen growing anti-immigrant sentiment in some
quarters of America. Such sentiment is fueled by notions
that immigrants take jobs away from American-born workers, drive down
wages, and pose economic and fiscal burdens on states and cities. Our
analysis suggests such notions are unfounded. Instead, we find that
metropolitan earnings are positively associated with the percentage of
immigrants. The correlation is .34 for all metros and .57 for large
Source: Data for the Gay Index is from the U.S. Census Bureau, 2006. The Gay Index is based on research by Dan Black, Gary Gates, Seth Sanders, and Lowell Taylor, and is updated based on 2006 data.
Another gauge of openness is the percentage of gay and lesbian people
living in a metro. Gay marriage may remain a political hot button,
but our findings show that locations with larger gay populations are
considerably better off economically. Our measure of gay populations
is the gay index --
initially developed by Dan Black, Gary Gates, Seth Sanders, and Lowell
Taylor, which we updated based on more recent data. The correlation
between the gay index and earnings was .4 for all metros and .56 for
large metros. It's hard to specify the exact connection between gays --
or immigrants -- and metro-level earnings. It might be
that higher-paying metros are more attractive to gays, immigrants, and
other Americans. My own view is that more open locations are better
able to compete for more talented and skilled people across the board.
There's one more data point that reinforces the connection between
openness and earnings. We looked at the correlations between earnings
and what psychologists have dubbed the "Big Five" personality types --
conscientiousness, agreeableness, extroversion, openness-to-experience,
and neurotics. Only one of these five types had a positive effect on
earnings: openness-to-experience. The correlation was .23 for all
metros and .3 for large metros. Open-to-experience people, as the name
implies, are exceedingly "open" to new experiences of all sorts. They
are highly clustered in urban, bohemian neighborhoods and are high on
creativity and innovativeness. Interestingly, three other big-five
personality types -- extroverted, conscientious, and agreeable people --
were all negatively associated with earnings. "One possible
explanation for these findings," notes Jason Rentfrow,
a personality psychologist at Cambridge University who has studied the
relationship between personality and locations, "is that the knowledge
economy is driving growth, and creative, resourceful, and imaginative
people are crucial to that growth."
That brings us to happiness. A big question is how does the trade-off
between hard work and earnings affect the happiness and well-being of
metros? The answer is pretty straightforward. Earnings play a bigger
role. The correlation between metropolitan well-being and earnings is
positive and statistically significant: .41 for all metros and .67 for
large metros. The correlation between happiness and hours worked
is negative for all metros (-.2) and statistically insignificant for
large metros. This pattern is different than that for states, where the
negative correlation for hours worked was stronger than the positive one
Once again, we find that working smarter, and not working harder, is
what brings wealth and well-being to metros. Longer work hours do not
translate into more wealth or higher earnings. Higher earnings turn on
higher levels of human capital and higher levels of creative class
jobs. Smart metros are also doing much much better in surviving and
prospering in the Great Reset. Our
findings question the notion that protecting or creating more
blue-collar factory jobs will lead to better earnings and improved
economic circumstance. Rather, we find that metros with high levels of
working-class jobs have significantly lower average earnings.
We also find a close connection between openness and tolerance and
earning levels. While some continue to cling to the belief that
immigrants drag down wage levels, that's not what we find at all. To
the contrary, metros with higher levels of immigrants have higher
average earnings. So do metros with greater concentrations of gays and
lesbians. It's impossible to pinpoint exactly what is causing what here
-- if richer locations offer more opportunity to immigrants, gays, and
everyone else, or if these more open locations reflect an underlying
economic system and set of industries that generate higher earnings.
The way I see it, more open and tolerant metros benefit from their
enhanced ability to attract ambitious and skilled people of all sorts
and from all backgrounds, races, ethnicities, and sexual orientations.
And, smarter metros not only generate higher earnings, they provide
greater levels of happiness and well-being to their residents.
It's high time we put aside the notion that hard work is the key to
economic success. It's working smarter, not working harder or longer,
that drives both earnings and economic development. The president, his
economic advisors, and city officials need to keep this top-of-mind in
their ongoing efforts to create jobs and spur economic growth.